Statements

ACT | The App Association welcomes the Preserving Taxpayers’ Rights Act, introduced by Representative Jason Smith and bipartisan co-sponsors in the House. We believe this bill will implement important efficiencies and protections to make the tax audit process clearer, more user-friendly, and more cost-effective for innovators across the app ecosystem. Following the introduction of this bill, App Association President Morgan Reed issued the following statement:

“Our country’s app developers and small businesses depend on smart tax policies that support their ability to grow and innovate. ACT | The App Association applauds Representatives Smith (R-MO-8), Sewell (D-AL-7), Holding (R-NC-13), Chu (D-CA-27), Curbelo (R-FL-26), and Thompson (D-CA-5) for introducing the Preserving Taxpayer’s Rights Act, which addresses an important issue impacting companies of all sizes. Tax audits can be confusing, cumbersome, and expensive for small app developers, and costly for the government. This legislation would help streamline the audit process to establish much-needed protections for our members, and support the work of the IRS. We are encouraged to see bipartisan attention to this issue, and today’s legislation is a positive step to protect taxpayers and their livelihoods.”

Judge Lucy Koh of the U.S. District Court’s Northern District of California denied Qualcomm’s motion to dismiss the Federal Trade Commission v. Qualcomm Incorporated case regarding standard essential patents (SEPs). In May, ACT | The App Association filed an amicus brief to outline the threat posed by the abuse of SEP licensing to innovation, competition, and interoperability. App Association President Morgan Reed issued the following statement on the decision.

“Judge Koh’s denial of Qualcomm’s motion to dismiss is an important step for the tech community, particularly small businesses that depend on open standards. Standards provide the crucial foundation for the technologies we use daily and innovations yet to come. We strongly believe that developers, creators, and manufacturers should be able to rely on fair, reasonable, and non-discriminatory (FRAND) access to standard essential patents when voluntary FRAND commitments are made. Regardless of the outcome, we hope a merit-based decision by the Ninth Circuit will provide needed clarity on the meaning and scope of a voluntary FRAND promise.”

Today, the U.S. Department of Justice asked the Supreme Court to review of the 2nd Circuit ruling that U.S. law enforcement warrants cannot extend to data stored abroad. ACT | The App Association President Morgan Reed issued the following statement in response to the decision.

“Today, the Department of Justice requested Supreme Court review of the 2nd Circuit ruling that U.S. warrants for data stored abroad do not extend overseas. The request provides important attention to this issue, but even a Supreme Court decision would not offer a comprehensive solution to the legal ambiguities American app developers and tech companies face when they receive requests for data stored abroad.

“We believe Congress must act to update antiquated digital data laws to not only protect people’s rights and support American businesses, but ensure U.S. law enforcement can effectively access data to conduct their investigations. Our businesses and law enforcement bodies deserve clarity. We will continue to push Congress to move legislation modeled after the International Communications Privacy Act (ICPA) to set clear rules and expectations for accessing electronic communications. America’s leadership in technology and integrity in international investigations hinges on legislative action to make this right.

Yesterday, the Centers for Medicare and Medicaid Services (CMS) released updated rules pertaining to the Medicare Access and CHIP Reauthorization Act (MACRA), legislation passed by Congress in 2015. Following rules released in October 2016, ACT | The App Association’s Connected Health Initiative (CHI) provided lengthy comments and feedback encouraging CMS to recognize and incorporate telehealth solutions into MACRA rules.

In response to the new rules released by CMS, ACT | The App Association President and Connected Health Initiative Executive Director Morgan Reed, released the following statement:

“CHI welcomes CMS’ stated goal to enhance the ability of Medicare caregivers to utilize connected health technology. However, in our initial review of the document’s more than 1,000 pages, we are concerned that the new MACRA rules inadequately account for the proven benefits of connected health technologies – telehealth, remote monitoring, and beyond – for American patients, doctors, and healthcare providers.

“The MACRA rules make minimal meaningful changes to reimbursement policies for telehealth or remote monitoring services, which is a disincentive to doctors and healthcare providers to leverage current, and future, innovations provided by app developers and telehealth companies.

“The future of the American healthcare system depends on innovations provided by technology, and CMS does a disservice to American patients by ignoring telehealth solutions to improve the quality and efficiency of care. While we appreciate the attention to electronic health records and health IT, this rule does not sufficiently improve the Medicare system’s ability to adopt remote monitoring innovations. The changes are imperative. Just as we encourage Congress to pass the CONNECT for Health Act to bring life-changing technologies to doctors and patients, we will continue to work with lawmakers and HHS to push CMS to create a Medicare system that brings broad connected health benefits to Americans across the country.”

Today, the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet held a hearing discuss the recent Supreme Court decision on the TC Heartland LLC v KRAFT Foods Group LLC case. ACT | The App Association submitted a letter for the record for the hearing, and App Association President Morgan Reed provided the following statement:

“We appreciate the House Judiciary Subcommittee on IP’s attention to this crucial issue. The Supreme Court’s ruling on TC Heartland was a victory for small businesses and app developers across the country, and we must ensure the patent system continues to support innovation and fight abusers. Many of our members have faced the threat, and the reality, of being dragged thousands of miles from their headquarters to fight frivolous patent infringement claims. The Supreme Court’s decision not only provides venue clarity for businesses facing patent litigation, but now it also allows them to continue focusing energy on growing their business and creating the next American innovation.”

Today, the Senate Judiciary Subcommittee on Crime and Terrorism held a hearing to explore “Law Enforcement Access to Data Stored Overseas.” ACT | The App Association President Morgan Reed released the following statement:

“Unless Congress updates the archaic Electronic Communications Privacy Act (ECPA), America’s innovative small businesses will face increasing uncertainty in the global marketplace. This lack of clarity could have devastating consequences for small app developers who rely on cloud computing to serve the 95 percent of consumers who live outside the United States.

“The current law does not clearly define how U.S. law enforcement can access data stored overseas, and foreign competitors and governments are using it to spread doubt about American companies in the marketplace. We need clarity now, and Congress can deliver it with legislation that modernizes the existing law. We hope today’s hearing will bring us closer to a solution that supports our companies, facilitates law enforcement needs, and ensures the protection of consumer data stored overseas.”

ACT | The App Association President Morgan Reed released the following statement on Apple’s manufacturing grant to Kentucky-based glass manufacturer Corning.

“Technology and manufacturing are unequivocal drivers of the American economy. We applaud Apple’s investment announcement, which will support high-skilled American jobs and drive greater technology-driven manufacturing throughout the country. Partnerships like these benefit American app developers creating innovative production solutions that keep our country a global technology leader and manufacturing a cornerstone of our economy.”

Following the release of the Presidential Executive Order on Strengthening the Cybersecurity of Federal Networks and Critical Infrastructure, ACT | The App Association President Morgan Reed issued the following statement:

“The President’s executive order on cybersecurity addresses several important issues related to data and network security. Our members have put extensive resources into ensuring Americans’ data privacy and security through cybersecurity risk management approaches, yet the cybersecurity workforce remains severely under-served due to a lack of available training and education options. We applaud the inclusion of workforce development and computer science components to drive innovation, protect data, and support the critical communications infrastructure that are the lifeblood of our economy.”

ACT | The App Association President Morgan Reed released a statement following the cancellation of the Senate Judiciary Subcommittee on Crime and Terrorism hearing on law enforcement access to data.

ACT | The App Association is disappointed by the cancellation of today’s Senate Judiciary hearing on law enforcement access to data stored overseas. Delays like this are frustrating. Failure to act and clarify when and how law enforcement may access data stored abroad disadvantages American companies operating in the cloud and impedes the protection of consumer privacy. We have repeatedly urged congressional action to address the ambiguity under current law, and today’s delay slows hard-fought momentum to find a solution that supports law enforcement needs and helps ensure the protection of consumer data stored overseas.

We encourage Congress to introduce and act on legislation modeled after the International Communications Privacy Act (ICPA), and we will continue to push Congress to ensure this issue receives the timely attention it deserves.

“The Connected Health Initiative (CHI) applauds the Senate Finance Committee’s decision, under the leadership of Senators Orin Hatch, Ron Wyden, Johnny Isakson, and Mark Warner, to reintroduce legislation for the CHRONIC Care Act. We have long advocated the important role healthcare technologies can play in treating the most debilitating illnesses in the most vulnerable populations.

“The reintroduction of this act is a step in the right direction to incorporate telehealth solutions into the treatment of chronic illness, specifically strokes, and help Medicare leverage the use of innovative technologies to improve patient outcomes and lower medical costs. However, Congress has more to do to bring the benefits of connected health technologies to more Americans, including improving the use of remote monitoring in community health centers and rural health clinics.

“Connected health technologies are vital components in the success of our country’s healthcare system, and we will continue to work with Congress to support an environment where more telehealth solutions may be used to improve care for more Americans.”

ACT | The App Association Executive Director Morgan Reed made the following statement:

“The continued success of the app economy is dependent on legal and regulatory certainty, and, although they are well-intentioned, the FCC privacy rules adopted last October could harm small businesses,” said Morgan Reed, executive director of ACT | The App Association. “We hope that Chairman Pai’s proposed stay gives the FCC time to revisit the data security portion of the rule, and review its impact. The FCC’s chosen data security standard differs from current federal requirements covering other sectors and potentially subjects a far broader range of information to strict regulation. This is not an optimal outcome for app developers or their users. We hope that if the FCC rewrites its privacy and data security rules, they more closely track the Federal Trade Commission’s approach while furthering the FCC’s statutory purpose of making communications services available to all people of the United States.”

In response to today’s 9th Circuit Court of Appeals decision, ACT | The App Association Executive Director Morgan Reed made the following statement:

“This executive order unjustly swept up our neighbors, our co-workers and our family members, and the Appeals Court decision is a win for our industry but most importantly for American values. There are many ways the immigration system can be improved and vetting enhanced, but we must do so without sacrificing our core values or encroaching on the rights of the men and women who help make America the world’s leader.

“A significant number of software companies, including those that make apps, rely on the best and brightest workers from overseas. Teaming with American engineers, these talented workers help drive the innovative products and services that define the robust app economy, which in turn creates more high-paying American jobs.

“Small companies undergo extremely onerous vetting processes and mountains of paperwork to grow and strengthen their businesses and the American economy.”

The House of Representatives today approved the Email Privacy Act (H.R. 387) to protect Americans’ privacy and public safety in the digital age.

In response, ACT | The App Association Executive Director Morgan Reed made the following statement:

“We applaud the House for passing the Email Privacy Act earlier today. Americans rely on the internet to store their most sensitive data including medical records, financial records, and private information. The Electronic Communications Privacy Act (ECPA) was enacted before the commercial internet took shape and simply doesn’t reflect modern realities or provide the American public the confidence they deserve in the privacy of their data.

“There is near unanimous support for updating these archaic privacy laws for the digital age, but the struggle has been getting both chambers to agree on the details. We hope congress can reconcile remaining differences to overcome that final hurdle with the Email Privacy Act and give American companies and citizens the legal clarity they need going forward.”

Today the Court of Appeals for the Second Circuit denied the government’s request for an en banc rehearing of the Circuit’s landmark Microsoft vs. United States decision, which affirmed that U.S. law enforcement cannot arbitrarily demand access to data stored overseas by American companies outside of established international legal norms. ACT | The App Association filed an amicus brief in support of Microsoft’s position and applauds the Second Circuit’s confirmation of its historic decision today.

“Today’s decision assures that U.S. law enforcement must work with American companies to follow the laws of other countries when striving to comply with demands for cloud data stored abroad. The Second Circuit’s refusal to rehear the case en banc reaffirms international rule of law as well as what most Americans already believe —documents stored digitally should be treated the same as documents stored in a filing cabinet.

“Today’s decision by the Second Circuit also validates our view that the U.S. government’s reliance on the 1986 Electronic Communications Privacy Act (ECPA) — a law enacted five years before anyone browsed the web – cannot be applied to today’s world, which is powered by mobile technology with consumer data typically stored remotely in data centers. Congress is better positioned than ever to remedy this controversy and pass legislation to modernize U.S. laws. We must meet consumers’ expectation of privacy, while ensuring that all nations respect each other’s borders. Finally, law enforcement must have the tools it needs to make the MLAT process work for everyone.

“The App Association’s interest in this case carries with it the need of thousands of American small business innovators for clarity around how and when law enforcement can access data stored overseas.”

The following statement has been issued by ACT | The App Association in response to the Korea Fair Trade Commission issuing a 1.03 trillion won ($853 million) fine on Qualcomm Inc. for violating antitrust laws:

“The Korea Fair Trade Commission (KFTC) has, after an extensive investigation, decided to significantly fine, and impose a corrective order on, Qualcomm Incorporated for systematically violating the commitments the company made to license its standards essential patents under fair, reasonable and non-discriminatory (FRAND) terms. FRAND abuse is an anticompetitive danger that poses a serious threat to the future of mobile computing and the Internet of Things.

Curbing the abuses the KFTC is addressing is an issue we are passionate about. That is why we launched All Things FRAND, an effort committed to ensuring a balance between patent licensor and licensee that FRAND commitments safeguard. And while FRAND promises are important, they are meaningless – and undermine innovation, particularly for small businesses – when ignored during subsequent licensing negotiations. ACT | The App Association applauds the KFTC’s decision in this matter, and looks forward to analyzing the details of its corrective order that will contribute to growing global precedent upholding the purpose and meaning of FRAND obligations.”

Today, The House Energy and Commerce Committee introduced a series of bills intended to help the FTC better engage with today’s rapidly evolving technologies. The following statement is from Morgan Reed, executive director of ACT | The App Association:

The App Association welcomes this effort by the Energy and Commerce Committee to modernize areas of the FTC. Representing startups and app companies across the Unites States, we frequently hear frustrations in navigating the regulatory process. Greater clarity and transparency can help small companies develop innovative new solutions that make our lives better.

Today the European Court of Justice ruled that the Safe Harbor agreement negotiated between the U.S. and EU was invalid. In response to the Court’s action, ACT | The App Association executive director Morgan Reed released the following statement:

This is an issue at the government-to-government level. While the tech industry suffers collateral damage, there are ways to continue our work without a disruption in core services.

Where this breakdown between governments will be felt most is with the small companies driving the app industry. Nearly 80 percent of the top-earning app companies are startups and new entrants that don’t possess the resources of large corporations.

In our mobile economy, businesses and consumers rely upon the services app makers provide. With the recent developments at the ECJ, app users are the ones losing out to government discord.

Today, the Office of Civil Rights launched a new website for health app makers aimed at providing a forum for HIPAA-related questions. In response to the tool for mobile innovators, ACT | The App Association executive director Morgan Reed released the following statement:

We are pleased that OCR is following through on Secretary Burwell’s commitment last year to make HIPAA clear for mobile health companies. Innovation in smartphones and tablets has made it possible for patients to monitor their own health and share critical data with physicians and loved ones. Mobile connectivity is poised to revolutionize healthcare by giving individuals greater access to their own health information and improving patient outcomes.

Unfortunately, a major obstacle to realizing the benefits of mobile health technology has been uncertainty around HIPAA. The introduction of smartphones has changed how the world communicates, but HIPAA reference materials on “Remote Use” date from before the iPhone even existed. The statute was originally enacted to help patients access their own health data, but it has evolved into a barrier making that information even harder to get.

Today’s OCR announcement is a step in the right direction, but there is a lot of ground to cover. What’s most important at this stage is to provide clear and meaningful guidance to app makers about how HIPAA will be implemented in a mobile environment. The App Association has highlighted several issues in this area requiring attention. Congress has also weighed in. We pledge to work with OCR to get resolution in these areas and to make this resource work best for companies committed to helping us live healthier through mobile technology.

ACT | The App Association executive director Morgan Reed released the following statement in response to today’s ECPA testimony by the Department of Justice before the Senate Judiciary Committee:

The Department of Justice claims it possesses the authority to access data stored abroad — and belonging to a foreign citizen — as long as it is held by an American company. Furthermore, DOJ has claimed in court that it is reasonable to sacrifice our citizens’ private information to any country in the world so that the U.S. can avoid complying with other nation’s privacy protections. This is simply outrageous and something the American public would view as a betrayal.

For American tech companies to remain global leaders, we must be clear with our trading partners that their citizens can store data in their home country with a U.S. company and retain the privacy protections provided by their sovereign government. The bipartisan, bicameral LEADS Act would clarify the law around DOJ’s extraterritoriality claim and address the international question left unresolved by ECPA. This is important for U.S. companies competing in overseas markets — and even more so for every American who doesn’t want rogue nations to have access to their personal information.

The following can be attributed to ACT | The App Association executive director Morgan Reed:

We’re proud to see ACT | The App Association member company AirStrip take to Apple’s big stage today and demo its incredible technology for the Apple Watch. Radically transforming the medical messaging world, patients and physicians can send encrypted, HIPAA-compliant messages with the AirStrip One and AirStrip Sense4Baby apps.

The apps take advantage of the powerful sensors packed inside the Watch, providing doctors with live data on patient vitals – from anywhere. This remote access to data is especially helpful in monitoring newborns.

With AirStrip Sense4Baby on the Apple Watch, an expectant mother and her physician can monitor her heart rate, the fetus’ heart rate, and contractions. The Sense4Baby system allows doctors to monitor mothers-to-be remotely, and give up-to-date information throughout her pregnancy.

AirStrip’s technologies demonstrate how mobile health solutions lead to better care and improved patient outcomes. We look forward to our continued work with this extraordinary company.

Today, Senator Al Franken sent a letter to Attorney General Loretta Lynch and FTC Chairwoman Edith Ramirez questioning Apple’s platform and music streaming offerings. In response to Senator Franken’s letter ACT | The App Association Executive Director Morgan Reed released the following statement:

We are disappointed in Senator Franken’s response to Apple’s new music offerings. Senator Franken is out of sync when he asserts that the company’s entrance into the music streaming market is anticompetitive. The mobile app marketplace is one of the most vibrant ecosystems in the world, and the introduction of Apple Music does nothing to make it less competitive. Further, while app makers make more money on Apple’s platform, it occupies a relatively small share of the global market.

As a recent article headline pointed out, “Spotify can’t pay an artist. But they can pay 6 different lobbying firms.” The company’s aggressive lobbying seems disingenuous given that Spotify has already crushed competitors like Sony Music Unlimited, Simfy and is making rapid gains on Pandora. Spotify is playing the defenseless ingenue when it’s really a foreign competitor worth billions. We understand that Spotify is upset that they have a new competitor, but that’s a good thing for consumers.

Senator Franken’s focus on the competitiveness question misses the larger goal – protecting consumers. By requiring all apps sold in Apple’s App Store to abide by the same rules, Apple aligns itself with consumers by taking responsibility for the transactions on its platform. Within the Apple ecosystem, if an in-app purchase or subscription doesn’t work, you can go to Apple to get a refund.

Apple provides a safe, secure marketplace for app makers to thrive. With a strong commitment to privacy, customers trust that their payment information and other sensitive data is kept safe and secure. The company’s move into the streaming music market simply allows them to occupy a moderately-sized space alongside other established services. We plan to provide Senator Franken and others with further guidance on this issue.

Today, ACT | The App Association member Amy Gleason of CareSync was named a White House Champion of Change as part of its Precision Medicine Initiative. VP of Public Affairs Jonathan Godfrey released the following statement commending this honor:

ACT | The App Association is proud to have nominated Amy Gleason for this honor. Her work and personal experience exemplify the qualities for which Champions of Change and the Precision Medicine Initiative were created. We look forward to our continued work with Amy to help improve patient access to their own critical health data.

FCC Chairman Tom Wheeler announced on Friday his intention to address privacy issues through the net neutrality order. Given the scores of legal challenges the order faces, it is a curious area for the Commission to expend its limited resources. Without a background in privacy enforcement, the Commission risks sowing confusion and uncertainty at a time when capital investment in our communications infrastructure is urgently required.

On Wednesday, May 27, ACT | The App Association Executive Director Morgan Reed will debate the booming wearable tech market at POLITICO’s event, “Outside, In: The Future of Wearable Tech.” Ahead of the event, Reed released the following statement:

The wearables explosion has created an incredible opportunity for innovators in the space. These devices not only have the potential to improve users’ fitness and lifestyle – they’re also novel, fun, and expanding beyond the health and wellness market. It’s now up to industry to ensure we’re providing these products in a way that is appropriate and meets consumers’ expectations.

Tomorrow, ACT | The App Association President Jonathan Zuck will testify before the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet on ICANN oversight and the proposal to transition the Domain Name System (DNS) away from the National Telecommunication and Information Administration (NTIA). Ahead of the hearing, Zuck released the following statement:

The pending transition is an opportunity for Congress, together with the ICANN community, to provide effective oversight and proper guidance. It’s a final chance to ensure the right accountability mechanisms are in place that will allow small companies to have a more substantial role in ICANN processes.

Next week, 50 top software executives from around the country will travel to Washington to meet with policymakers and regulators about the top tech innovation priorities as part of ACT | The App Association’s 2015 Fly-In. Over two days, the app makers and mobile entrepreneurs will raise concerns about data privacy and security, internet governance, patent reform, and regulatory obstacles to growth. Ahead of the Fly-In, Executive Director Morgan Reed released the following statement:

The booming mobile economy is dominated by startups and small tech companies that are innovating and creating jobs in every state and district of the country. Our members are traveling to D.C. to make the case for a government approach to technology policy that fosters innovation and promotes growth in our communities.

This morning Reps. Tom Marino and Suzan DelBene introduced the Law Enforcement Access to Data Stored Abroad Act (LEADS Act) in the House of Representatives. This legislation shows that there is a bipartisan, bicameral commitment to assure the future of American tech companies that operate abroad.

On behalf of ACT | The App Association and the more than 5,000 mobile app and software companies, Executive Director Morgan Reed released the following statement in support of the LEADS Act:

ACT | The App Association strongly supports the bipartisan introduction of the LEADS Act in the House of Representatives. We have long looked to Reps. Marino and DelBene for leadership on issues facing the tech community and applaud their commitment to improving privacy protections and cross-border data flows.

Cloud computing is essential to global commerce and has revolutionized how we communicate and access content. American technology companies are leaders in cloud services, both at home and abroad. Yet, our European allies are threatening to ban U.S. cloud providers over concerns that their citizens’ data isn’t safe when stored by companies within reach of the U.S. government.

Alert to these concerns, the LEADS Act requires law enforcement to treat digital information the same as physical goods: through warrants and information exchange treaties that comply with the law of the country where it resides. The LEADS Act effectively balances the needs of investigators and prosecutors with individual privacy protections. We thank Reps. Marino and DelBene for their leadership and commitment to find a solution for this critical issue.

Today Senator Orrin Hatch announced he will introduce the Law Enforcement Access to Data Stored Abroad Act (LEADS Act). This legislation is critical for the future of American companies that provide or use cloud services abroad.

On behalf of ACT | The App Association and the more than 5,000 mobile app and software companies, Executive Director Morgan Reed released the following statement in support of the LEADS Act:

“We applaud Senator Hatch for his leadership on issues facing the tech community and are proud to lend strong support for the LEADS Act. The legislation brings long overdue clarity to the treatment of stored communications, and goes a long way to protect individual privacy rights on a global scale.

“Cloud computing is at the heart of the digital revolution, vastly improving the way we handle information technology, conduct business, and consume media. American technology companies are leaders in cloud services, both at home and abroad. Yet, our European allies are threatening to ban American cloud service providers over concerns that their citizens’ data isn’t safe when stored by companies within reach of U.S. law enforcement. The LEADS Act prevents this from happening.

“The comprehensive legislation provides a much-needed legal framework by which data can be accessed abroad, updating and strengthening the Mutual Legal Assistance Treaty (MLAT) process. Passage of the bill will effectively balance the needs of investigators and prosecutors with individual privacy protections. The future of the innovation economy requires trust from our trading partners and clearly defined limits for law enforcement. The LEADS Act does just that.”

ACT | The App Association applauds House Judiciary Committee Chairman Bob Goodlatte for reintroducing the Innovation Act with broad bipartisan support. Executive Director Morgan Reed released the following statement in support of the legislation:

“ACT | The App Association thanks Chairman Goodlatte for his continued commitment to our country’s innovators and entrepreneurs. The Innovation Act is critical to our members and is a major step in dealing with bad actors who abuse the patent system.

“Our members face daily attacks from patent trolls who create fear and uncertainty in the app ecosystem. The Innovation Act includes strong measures to ensure transparency in patent ownership, clarify what is and what is not infringement, and allows defendants to recover legal costs from meritless cases.

“Passage of the bill would go a long way to protect small companies from costly litigation that stifles innovation. We look forward to working with Chairman Goodlatte and the bill co-sponsors to build a better patent system that prevents abuse.”

Today Senators Mike Lee and Patrick Leahy, and Congressmen Jared Polis and Kevin Yoder released bills to reform the Electronic Communications Privacy Act (ECPA) of 1986. The bipartisan bills from both chambers will bring much-needed updates to data privacy in the mobile world. Following the release of the bills, ACT | The App Association Executive Director Morgan Reed released the following statement:

“ACT | The App Association applauds Senators Lee and Leahy, and Congressmen Polis and Yoder for their commitment to data privacy. When ECPA was drafted in 1986, email was hardly in use and the World Wide Web – which we now recognize as the public internet – was still five years away. Back when people didn’t store data online, the authors thought it was reasonable to search electronic communications after 180 days without probable cause. But today we store financial records, personal data, and private information electronically, and ECPA no longer meets consumers’ expectations of privacy.

“We have long advocated for legal clarity that encourages the adoption of new technologies, and provides an environment for innovation. The American public must have confidence in the privacy of their data for app companies and technology firms to succeed. This reform legislation will go a long way to ensure that happens.”

Today Congressmen Marino and DeFazio sent a letter to HHS Secretary Sylvia Burwell that outlined several steps HHS should take to provide clarity surrounding confusion on HIPAA in the mobile health marketplace. This followed a letter sent Monday from ACT | The App Association and leading mobile health companies to Congress. In response to the swift action taken by Congressmen Marino and DeFazio, App Association Executive Director Morgan Reed issued the following statement:

“The App Association is pleased that Congress is strongly committed to the success of mobile health innovation. Our companies are using mobile connectivity from smartphones and tablets to give consumers greater access to healthcare providers and more control over their health information.

“We are committed to providing a safe and secure environment for our consumers with strong privacy protections. Unfortunately, we are working in a regulatory environment that has not kept pace with the rapid growth of technology.

“The app industry has long looked to Congressmen Marino and DeFazio for their leadership on tech issues. We are grateful for their support to create a better regulatory environment that encourages innovation in this life-changing marketplace. HHS needs to know that they have champions both in Congress and industry that want to see HIPAA improved.”

ACT | The App Association President Jonathan Zuck issued the following statement today in response to the District Court ruling that requires Microsoft to provide federal investigators access to email communications stored overseas:

“It is clear from today’s actions that the court is out of step with global privacy concern. This has the potential to undermine the mobile app industry for which the cloud is critical.

“Consumers and business customers around the world are questioning whether data stored by a U.S. company will ever be beyond the reach of the American government. Sadly, today’s District Court decision reinforces those fears and serves as an engraved invitation for our trading partners to discriminate against U.S. companies. It is also a green light for unscrupulous foreign entities seeking to seize the private communications of American companies and citizens living abroad.

“To obtain documents and information for the purpose of enforcing laws, governments use a mutual legal assistance treaties (MLAT) to facilitate that exchange. However, in this case, the U.S. government is trying to circumvent that process by saying a warrant issued in the U.S. is sufficient to make Microsoft copy that information in Ireland and turn it over to authorities in the U.S.

“American companies now face an international backlash as a result of the court’s decision. The European Union and countries around the world are considering measures to prevent U.S. businesses from providing cloud services within their borders. Nearly every app maker in the world sells their products through cloud services provided by Amazon, Apple, Google, and Microsoft. Without U.S. cloud providers, there would be no app stores leaving our $68 billion industry imperiled. If access to foreign markets is restricted, revenues will fall and hundreds of thousands of jobs will be affected.

“The U.S. is the world leader in providing amazing applications and services in a globally available cloud. The Court ruling today would destroy that leadership, and crush opportunities for not just big players, but for thousands of small companies throughout America.”

Today the Federal Trade Commission made updates to its FAQ for the Children’s Online Privacy Protection Act (COPPA) in response to concerns raised by app makers and parents. This FAQ is the principal means by which the Commission provides guidance for its children’s online privacy regulation.

“Today’s action by the FTC gives platforms and app makers more guidance in areas where confusion has persisted. With the Commission now providing a better explanation of the regulatory landscape, we expect innovation and investment in children’s education apps to grow markedly.

“During the past year, ACT | The App Association has been meeting with the FTC to stress the need for more clarity around COPPA. ACT Members from the education, special needs and games communities were confronting COPPA guidance that did not accurately reflect how parents, app makers, and kids interact with mobile devices. Today’s should help platforms, developers and parents as we create new apps that engage children.”

The FTC guidance specifically includes improved methods of verifiable parental consent, definitions involving internet operator, and clarifications around the liability exposure of platforms.

“The FTC’s steps to improve clarity around COPPA removed some major obstacles that discouraged app makers from entering the children’s market. We believe now that more companies will embrace the opportunity to make engaging and educational apps for children.”

ACT | The App Association executive director Morgan Reed issued the following statement today in response to the FDA’s draftguidance that would exempt many low risk medical apps and devices from FDA review:

“Today’s draft guidance continues the FDA’s strong push towards innovation-friendly policies. This clarification will help provide a clearer path for new entrants to the field.

“Health app makers continue to seek more clarity and simplification from the FDA and welcome today’s efforts to minimize the obstacles they face bringing new products to market.”

ACT | The App Association executive director Morgan Reed issued the following statement in response to today’s Supreme Court ruling in Riley v. California requiring a warrant for law enforcement access to smartphone data of an arrested suspect.

Today’s Supreme Court ruling establishes critical privacy protection standards for mobile device users. Consumers will have confidence in the security of their smartphones and tablets knowing that law enforcement needs a warrant to access their data.

Today’s decision also provides a clear indication of where the court sees the boundaries of government surveillance. The tech industry is united behind legislation to provide a similar warrant standard to all online data. Congress should not dither while the opportunity exists to extend these privacy protections to all users.

Today’s Supreme Court decision is good news for software patents. It clarifies what is patentable, removes some of the uncertainty, and confirmed what we all know to be true: abstract business methods don’t deserve patent protection. Today’s decision reaffirms the validity of software patents, which are a valuable tool for small company innovators.

ACT | The App Association executive director Morgan Reed issued the following statement on today’s WWDC event where Apple unveils its new line of products for the coming year. A licensed iOS developer, Morgan Reed is the leading authority on the intersection of the app industry and government with a particular focus on health and education. Reed is also the Legal and Policy Chair of the mobile health IT organization mHIMSS and serves as education apps advisor to the 1700 members of Moms With Apps.

“We’ve come to expect innovation from Apple that drives the mobile economy. The new products and services unveiled annually by Apple foster tremendous growth and opportunity for independent software companies. Today is no different. The developer community is excited with today’s announcement and are already at work creating apps to take advantage of these new marketplace possibilities.”

ACT | The App Association executive director Morgan Reed issued the following statement on Apple’s announcement of its new HealthKit. Reed also serves as the Legal and Policy Chair of the mobile health IT organization mHIMSS.

“HealthKit will be an incredibly valuable tool for developers in the mobile health and wellness space. Providing a single, secure place for users to store medical and fitness data, Apple will help make mobile devices the center of our digital health lives. Independent app makers will find great opportunities to use HealthKit to keep their users engaged in their digital health and wellbeing. Users can be confident in the security of their health care data through HealthKit’s superior encryption. By restricting apps from selling user health information to advertisers or data brokers, Apple is creating a platform that users can trust with their sensitive medical and health data.”

ACT | The App Association president Jonathan Zuck issued a statement on today’s news that Senate Judiciary Committee Chairman Patrick Leahy has been moved patent reform off the agenda.

ACT | The App Association is disappointed with the news that patent reform is no longer on the Senate agenda. It is regrettable that the inability of Congress to advance widely supported legislation will expose many small companies to predatory litigation. Patent trolls use bogus patents to shakedown startups and smaller companies with limited legal resources. We must put an end to the business model that is based on abusing the patent system. Failing to act on this issue may profoundly impact the innovation we are seeing through small businesses and new entrants in the mobile economy.

ACT has been closely monitoring FTC’s enforcement of privacy violations in the mobile app ecosystem. It is good for the industry when consumers have confidence that their personal information is safe. Effective enforcement actions against bad actors provide a disincentive to bad behavior.

Snapchat was certainly guilty of sloppy coding and there was an obvious disconnect between its privacy policy and the information it collected and shared with others. This illustrates why it’s critical to expand privacy education programs for the developer community.

It was surprising, however, when the FTC levied the same punishment against Snapchat that others received after committing violations of a far greater scale: twenty years of audits, but no admission of wrongdoing. This cookie cutter solution begs the question: what is the FTC hoping to achieve?

The Commission may not be delivering its intended message. Snapchat’s privacy and security shortcomings don’t measure up to the repeated violations of industry giants. Yet, when the punishment rarely changes and never seems to fit the offense, the likeliest outcome is that emerging tech companies will approach FTC enforcement as nothing more than the cost of doing business.

“School administrators often are provided few details about how online service providers handle data collected on children, and recent court cases reveal that some companies use information from the classroom to target advertising to children. Parents need to know whether schools are selling information about their children. They should get to decide whether their child’s data should be commoditized by schools to benefit advertisers.”

Association for Competitive Technology executive director Morgan Reed issued the following statement in response to today’s request by six Senators for more clarity on FDA’s regulation of mobile medical apps. Earlier this year, Mr. Reed toured the country speaking to app makers and venture capitalists about opportunities in the mHealth field.

“I am pleased to see the Senate is seeking further clarity on the regulation of mobile medical apps. It is important that government and industry become better informed about health apps that are improving patient outcomes. We are already seeing remarkable results in chronic disease care through the use of smartphones and tablets. The regulatory environment will be a critical factor in determining how patients may best use mobile devices to monitor their health and communicate with healthcare providers.”

In response to today’s passage of the STEM Education Act of 2015 by the House of Representatives, ACT | The App Association Executive Director Morgan Reed released the following statement:

“We are pleased to see the House pass the STEM Education Act of 2015 with overwhelming bipartisan support. The bill adds computer science to the definition of STEM education for federal purposes, meaning federal education programs will be better aligned with the needs of the booming tech industry in the United States.

“Our colleges and universities have been producing far fewer computer science graduates than what is needed to meet the demand for software developers and app makers. For the United States to remain a global leader in technology and innovation, our students must be equipped with computer science skills from a young age. The STEM Education Act is a good start to ensure that happens.”

ACT Executive Director Morgan Reed issued the following statement in support of the FCC’s decision to conduct trials for converting legacy networks to an IP-based architecture:

“FCC Chairman Wheeler has publicly stated that’s a question of when, not if, the transition to IP networks will occur. Today’s FCC decision is an indication that this transition is coming soon and the app industry is encouraged by this development.

“Mobile apps and smartphones have leveraged wireless data to change the way we communicate and access information. We are now seeing new innovations in mobile medicine enabled by advancing wireless technology that allow users to better manage chronic disease and interact with their physicians. Dependable and more robust communications networks are essential for patients to benefit from these new advances in medical technology.

“Continued investment in our telecommunications infrastructure is critical for everyone in the mobile economy. Starting the process now to transition to all-IP networks ensures that we are closer to developing the resources that will allow us to produce even more life-changing technologies in the years ahead.”

Association for Competitive Technology President Jonathan Zuck will be attending the President’s address this morning regarding the future of NSA surveillance. He issued the following statement in anticipation of today’s announcement:

“The tech industry has been deeply troubled by revelations of expansive government surveillance. NSA attempts to disable security measures protecting the communications infrastructure of American companies is a threat to our consumers in the U.S. and abroad. International response to these actions puts our access to global markets at risk.

“The nation’s law enforcement and intelligence services should implement transparency measures and come clean with citizens around the world about the requests it makes of American tech companies. The next five years of innovation in the mobile marketplace will require significantly greater consumer trust than the last five years. Our future depends on consumer confidence in cloud services.

“The U.S. tech industry cares deeply for the safety of our country, but our government must not compromise the integrity of our core services to conduct surveillance.”

Association for Competitive Technology executive director Morgan Reed issued the following statement in response to the release of a study today by Fordham University, “Privacy and Cloud Computing in Public School.”

“Schools across the country are taking advantage of cloud-based services that allow teachers and administrators to better serve students and their families. Homework can be assigned and completed online where it is unlikely to be eaten by the family dog. Using cloud services, parents and teachers can better monitor their students’ progress to help them reach higher academic achievement.

“Today’s Fordham study highlights the need for schools to require service providers to meet high standards for safeguarding student information online. It will be critical for online services to meet appropriate standards for student data usage and to clearly convey this information to school administrators.”

“ACT’s members, specifically those in the Moms with Apps Know What’s Inside™ program, continue to look to the FTC’s FAQs for guidance when building innovative and cutting-edge technologies. We’re thankful that the FTC continues to listen to the concerns of our membership and are hopeful for additional updates that clarify COPPA for app developers around the world.

“We’re pleased the FTC took steps to define actual knowledge. This guidance provides much needed clarity for both operators and third party service providers wanting to comply with the law that went into effect on July 1. In addition, the FTC acknowledged the industry’s work on developing technological measures that could be used to signal an app is child directed, thereby allowing third party services to manage data differently.

“It’s unfortunate, however, that the FTC still seeks to deputize third parties as COPPA cops. Under this guidance, if a third party operator is presented with screenshots purporting to show that an application is directed at children, but the app maker disputes this claim, the FTC is requiring the third party to perform as judge, jury and ultimately executioner. We believe determining child directedness is the responsibility of the operator and, ultimately, the FTC. We will continue to work on this issue, and are hopeful that other solutions mentioned in the FAQ will obviate the need to turn third party operators into the police.

“We are also concerned about FAQ D.9 which sets rules regarding buttons for popular email and social media providers. We will need to see how this item might inadvertently impact features like ‘parent zones’ within apps, innovative new features, or other parent engagement tools. We look forward to working on these issues with all stakeholders, from parents to developers, third parties and the FTC.”

Association for Competitive Technology President Jonathan Zuck issued the following statement accompanying the tech companies’ letter to House Judiciary Members on the Innovation Act.

“We heard from a number of small tech companies and ACT members about their concerns with the covered business method patent provisions in H.R. 3309, the Innovation Act. While supporting many of the provisions in the proposed legislation, startups and small tech companies are fearful that the expansion of the transitional program for covered business method patents will result in added costly litigation. They shared their concerns through this letter to House Judiciary Committee members in advance of today’s legislative hearing on the Innovation Act.”

The undersigned companies applaud the introduction of the Innovation Act (H.R. 3309) for responding to the need to improve the patent system. While we support the intent of the bill, we are concerned that the proposed extension of the transitional program for covered business method (CBM) patents will have a significant and negative impact on small technology companies.

Morgan Reed, Legal and Policy Chair of the world’s largest mobile health organization, mHIMSS, today issued the following statement in response to the FDA’s issuance of its final mobile health guidelines.

“We’ve long awaited the FDA’s issuance of final guidelines affecting mobile medical apps. Regulatory certainty is essential for the mobile health industry to realize its potential. Many innovative apps that use mobile devices to help users monitor their health and bring patients closer to caregivers have been shelved until developers and investors better understand FDA’s plans to regulate. We are hopeful that today’s announcement provides the clarity we seek.

“Serving as executive director within the world’s leading mobile app organization while chairing the Legal and Policy Task Force at the world’s largest mobile health organization provides an excellent opportunity to advance the priorities of the mobile health community. I will marshall the resources of ACT and mHIMSS to explore the details of the FDA guidance and ensure developers are well informed about their requirements. We will also continue to work with the FDA to assist with technical expertise as our industry continues to grow and innovate.

“We have scheduled an October 23rd briefing, that has already received over 500 registrants. We will be conducting additional briefings throughout the country to educate app makers about opportunities in the mobile health marketplace and the guidelines they must follow.”

Association for Competitive Technology executive director Morgan Reed issued the following statement following Apple’s announcement for the pending release of the iPhone 5C and 5S:

“App developers are working to bring new products to market to take advantage of the latest features in Apple’s newest iPhones. The iPhone 5S includes a new chipset and features that makes possible an incredible range of mobile services. The M7 chip and CoreMotion API will usher in a wave of innovation in the mobile health marketplace. Measuring movement in an entirely new way, the M7 chip uses contextual awareness to monitor a wide range of user activities. The potential for this device to bring patients closer to physicians while providing detailed measurements of vital statistics and activity will have a profound impact on health care delivery in the United States. Mobile health app makers are excited about the opportunities this new technology offers.

“The iPhone 5S will also provide users with an added level of security. Touch ID fingerprint sensor will measure sub-epidermal skin layers to verify user identity and ensure that App Store purchases are made by account owners. This latest feature adds to the confidence that iPhone users have long had regarding the security of their data on the iOS platform.

“Additionally, the introduction of the lower cost 5C will bring scores of new customers to iOS developers. At only $99, a new iPhone is now in reach for many more smartphone buyers and potential app users.”

Executive Director of the Association for Competitive Technology, Morgan Reed, issued the following statement welcoming the news that Microsoft is acquiring the business and mobile units of Nokia. While Nokia will retain its networking services with Siemens, its mobile mapping product Here, and its patent portfolio, Microsoft will acquire the Finnish company’s mobile devices and services businesses.

“Microsoft’s proposed acquisition is great news for app development companies. It will provide developers the opportunity to market products and services to another integrated mobile platform with a rapidly expanding user base. ACT’s members are focused on enterprise, health, education, and government – lucrative sectors of the app economy. Products developed for these areas require a mobile platform that consumers trust with the safety and security of their data. This latest effort is aimed at those important marketplace developers.

“Microsoft’s move today indicates a strong commitment to its future as a mobile device and services company. The acquisition will enable the company to innovate more quickly integrating devices and the mobile operative system. Microsoft is also poised to grow its international user base with the acquisition of Nokia’s feature phone business whose consumers will be making the transition to smartphones. These developments will weigh in Microsoft’s favor as developers choose platforms for their apps.”

Association for Competitive Technology Executive Director Morgan Reed today released the following statement in response to recent media reports that Apple’s new iTunes service options will allow children under the age of thirteen to sign up for education accounts.

“The new update to iTunes allowing preteens to sign up for education accounts will dramatically improve the learning environment for schoolchildren,” said ACT Executive Director Morgan Reed. “The interactivity of the iPad’s touchscreen keeps children engaged in the classroom. Its intuitive interface is simple for even the youngest students to grasp. A curated education platform for kids is the responsible way to allow those under thirteen to benefit from these learning tools.

“Requiring verifiable parental consent means that parents are able to give their children access to the resources of Apple devices with a clear understanding of what data Apple collects from their children and how it is used. This allows classroom instruction to be more productive while providing a framework for the growing education app marketplace.

“Apple’s new Mobile Device Management (MDM) options for iOS 7 provides both teachers and developers a powerful platform to deliver educational tools to children. MDM allows teachers to control access to apps on classroom iPads, restricting students to lesson plan apps. This same service allows app developers to make bulk sales to academic institutions through the App Store Volume Purchase Program.”

ACT has witnessed the success of tablet education firsthand as over 1500 of its members have combined to form Moms With Apps. Working within ACT, this group has spearheaded the Know What’s Inside™ initiative.

“As more schools are embracing the benefits of educational apps through one-to-one programs, school administrators and families want the best apps that are safe for kids and transparent in their data practices,” continued Reed. “The Know What’s Inside™ initiative was created by kids app makers who are parents first and education developers second. Know What’s Inside™ awards its trusted logo to kids app developers that meet the highest standards for education, privacy, and transparency.”

Research has demonstrated the extraordinary benefits of tablet learning throughout the country:

Becker, MN

23% increase in MCA 6th grade math score from previous year

Additional achievement gained in GPA in high school 1:1 program, including 250 more A’s and B’s

– 2012-13 Annual Report

Instructional Technology in

Becker Public Schools

Riverside, CA

Jay McPhail, Riverside Unified’s director of instructional technology, said 90.5 percent of students using iPads are testing as proficient or above on benchmark tests, compared with 60 percent in other classes.

– eSchool News

Charleston, SC

At the end of the school year, 83% of students read above their grade level using the iPads in the classroom. This was a dramatic increase from the previous year when that figure was 39% without iPads.

– Kristi Meeuse, Kindergarten Teacher

Drayton Hall Elementary

Rochester, NY

“Children [are coming] from a wide variety of background and countries, but almost any of them can pick up an iPad and naturally figure out how to use it.”

– Kristi Ziehl, Program Specialist, Rochester Institute of

Technology’s Information and Technology Services

Wake Forest, NC

“There is early evidence that the use of the iPad has resulted in a higher engagement rate while in class, and extended the connection time with the content to moments well beyond the normal class time.”

– David Mahaley, Principal, Franklin Academy

High School, Wake Forest, North Carolina

Highland Park, IL

Pilot staff reported that the use of the iTechnology in their classrooms has been highly successful. Found students to be more motivated and on task with the iPad. Most students were easily able to access the iPad, even those who experience difficulty with physically accessing other tools.

“It’s a bit surprising that the FTC sought to pursue a case against a company that had already offered a refund to every consumer who registered a complaint. This agreement clarifies that the modifications Apple made to its in-app transaction process ensures greater consumer awareness at the moment of purchase. We respect the FTC’s ability to go after bad actors, and hope the Commissioners will focus their enforcement action on those who are not providing the level of transparency consumers require.

“In light of today’s action, ACT announces that it will provide parents, teachers, and healthcare professionals with resources about in-app purchases through Moms With Apps. Apple already has many features available that allow for parental control when it comes to in-app purchases and other app features. Knowing how to use these restrictions puts parents in control of what their child can and cannot do on a device. Education on device restrictions, parental controls, and app transparency will help parents understand the rapidly changing innovations in the technology space.

“Opportunities for app developers in the educational space abound. With tablets in schools, at home, and even in the doctor’s office, most children have access to apps on a daily basis. We must preserve the pace of innovation all the while encouraging those developers that are transparent and trustworthy.”